Berman Capital Advisors Increases ServiceNow Position

Berman Capital Advisors LLC increased its position in ServiceNow Inc (NYSE:NOW) by 6.9% during the second quarter of 2019, according to the firm’s most recent Form 13F filing with the U.S. Securities and Exchange Commission (SEC). After purchasing an additional 219 shares during the quarter, the firm held a total of 3,384 shares in the information technology services provider, valued at approximately $928,000 at the end of the quarter.

Broader Institutional Investor Activity

Several other institutional investors also adjusted their ServiceNow holdings around the same period:

• Marshall Wace LLP opened a new position in ServiceNow during Q1 2019, valued at approximately $724,000.
• Arcadia Investment Management Corp MI increased its stake by 219.5% in Q2 2019, acquiring an additional 1,855 shares to reach a total of 2,700 shares valued at $741,000.
• Dock Street Asset Management Inc. initiated a new position in Q1 2019 valued at approximately $937,000.
• Roman Butler Fullerton & Co. grew its stake by 4.9% in Q1 2019, adding 133 shares for a total of 2,857 shares valued at $704,000.
• Glaxis Capital Management LLC opened a new position in Q1 2019 valued at approximately $2,075,000.

As of the time of this report, approximately 92.95% of ServiceNow’s outstanding stock was held by hedge funds and other institutional investors.

Stock Performance and Key Financial Ratios

Shares of NYSE:NOW opened at $263.82 on the Friday preceding publication. Key metrics at that time included:

• 50-day moving average: $285.13
• 52-week low: $147.63
• 52-week high: $303.17
• Market capitalisation: $48.55 billion
• P/E ratio: 1,319.10
• PEG ratio: 21.78
• Beta: 1.30
• Quick ratio: 1.13
• Current ratio: 1.13
• Debt-to-equity ratio: 0.88

Q2 2019 Earnings Results

ServiceNow reported its Q2 2019 earnings on Wednesday, 24 July 2019. Key highlights included:

• EPS: ($0.01), beating the Zacks consensus estimate of ($0.03) by $0.02.
• Revenue: $833.90 million, slightly ahead of the analyst consensus of $831.50 million.
• Year-over-year revenue growth: 32.1% compared to the same quarter in 2018.
• Return on equity: 4.44%
• Net margin: 0.09%

For context, ServiceNow reported EPS of $0.49 in the same quarter the prior year. Analysts at the time collectively expected full-year EPS of $0.43 for the current fiscal year.

Analyst Ratings and Price Targets

Multiple Wall Street research firms issued updated commentary on ServiceNow shares around the time of publication:

• Barclays raised its price target from $270.00 to $280.00 with an Overweight rating (April 25th research note).
• Jefferies Financial Group raised its price target from $285.00 to $330.00 with a Buy rating (July 25th research note).
• Deutsche Bank raised its price target from $285.00 to $305.00 with a Buy rating (May 7th research note).
• Cowen raised its price target from $260.00 to $280.00 with an Outperform rating (April 25th research note).
• Piper Jaffray Companies raised its price target from $260.00 to $270.00 with an Overweight rating (April 25th research note).

In aggregate, four analysts held a Hold rating, twenty-six issued a Buy rating, and two assigned a Strong Buy rating. The consensus price target stood at $287.86 with an overall consensus rating of Buy.

Insider Transactions

Two notable insider sales were reported around this period:

• Michael Scarpelli (insider) sold 25,899 shares on 16 May 2019 at an average price of $278.41, totalling $7,210,540.59. Following the sale, Scarpelli directly held 37,071 shares valued at approximately $10,320,937.11. The transaction was filed with the SEC.
• Chirantan Jitendra Desai (insider) sold 1,560 shares on 8 August 2019 at an average price of $263.05, totalling $410,358.00. Following the sale, Desai held 3,094 shares valued at approximately $813,876.70.

Over the preceding quarter, company insiders collectively sold 116,647 shares of stock valued at approximately $32,406,691. Insiders held approximately 1.00% of the company’s outstanding stock at the time of reporting.

About ServiceNow

ServiceNow, Inc. provides enterprise cloud computing solutions that define, structure, manage, and automate services for enterprises worldwide. The company offers IT service management (ITSM) applications alongside digital workflow products covering customer service, human resources, security operations, integrated risk management, and other enterprise functions. ServiceNow trades on the New York Stock Exchange under the ticker symbol NOW.

Note: All financial data in this article reflects conditions as of August 2019 and should not be used as current investment guidance.